Secretary of DPWH vs Heracleo

Case Digest GR 179334 Apr 21 2015

Facts:

Spouses “Heracleo” are the co-owners of a land which is among the private properties
traversed by MacArthur Highway in Bulacan, a government project undertaken sometime
in 1940. The taking was taken without the requisite expropriation proceedings and
without their consent.
In 1994, Heracleo demanded the payment of the fair market value of the property. The
DPWH offered to pay 0.70 centavos per sqm., as recommended by the appraiser
committee of Bulacan. Unsatisfied, Heracleo filed a complaint for recovery of possession
with damages.

Favorable decisions were rendered by the RTC and the CA, with valuation of P 1,500 per
sqm and 6% interest per annum from the time of filing of the until full payment. The SC
Division reversed the CA ruling and held that computation should be based at the time
the property was taken in
1940, which is 0.70 per sqm. But because of the contrasting opinions of the members of
the Division and transcendental importance of the issue, the case was referred to the En
Banc for resolution.

Issue 1: W/N the taking of private property without due process should be nullified

No. The government’s failure to initiate the necessary expropriation proceedings prior to
actual taking cannot simply invalidate the State’s exercise of its eminent domain power,
given that the property subject of expropriation is indubitably devoted for public use, and
public policy imposes upon the public utility the obligation to continue its services to the
public. To hastily nullify said expropriation in the guise of lack of due process would
certainly diminish or weaken one of the State’s inherent powers, the ultimate objective of
which is to serve the greater good.

Thus, the non-filing of the case for expropriation will not necessarily lead to the return of
the property to the landowner. What is left to the landowner is the right of compensation.

Issue 2: W/N compensation is based on the market value of the property

at the time of taking

Yes. While it may appear inequitable to the private owners to receive an outdated
valuation, the long-established rule is that the fair equivalent of a property should be
computed not at the time of payment, but at the time of taking. This is because the
purpose of ‘just compensation’ is not to reward the owner for the property taken but to
compensate him for the loss thereof. The owner should be compensated only for what he
actually loses, and what he loses is the actual value of the property at the time it is taken.

Issue 3: W/N the principle of equity should be applied in this case

No. The Court must adhere to the doctrine that its first and fundamental duty is the
application of the law according to its express terms, interpretation being called for only
when such literal application is impossible. To entertain other formula for computing just
compensation, contrary to those established by law and jurisprudence, would open
varying interpretation of economic policies – a matter which this Court has no
competence to take cognizance of. Equity and equitable principles only come into full
play when a gap exists in the law and jurisprudence.

Velasco Dissent:
The State’s power of eminent domain is not absolute; the Constitution is clear that no
person shall be deprived of life, liberty and property without due process of law. As such,
failure of the government to institute the necessary proceedings should lead to failure of
taking an individual’s property. In this case, since the property was already taken, the
complainants must be equitably compensated for the loss thereof.

For purposes of “just” compensation, the value of the land should be determined from the
time the property owners filed the initiatory complaint, earning interest therefrom. To
hold otherwise would validate the State’s act as one of expropriation in spite of
procedural infirmities which, in turn, would amount to unjust enrichment on its part. To
continue condoning such acts would be licensing the government to continue dispensing
with constitutional requirements in taking private property.